The attorneys general had noted that three federal district courts and the 10th U.S. Circuit Court of Appeals had upheld the fiduciary rule process. They said that by vacating the fiduciary rule, the 5th Circuit Court of Appeal’s decision “will deprive millions of Americans of basic safeguards as they seek financial advice about their retirement investments; will cost millions in lost taxes over the next 10 years and will cost hardworking Americans who are saving for retirement tens of billions of dollars; wrongly held that the Department of Labor lacked authority to require financial advisers to holders of Individual Retirement Accounts (IRAs) to act in their clients’ best interests; and conflicts with the decisions of three other courts, including the 10th Circuit, that have upheld the fiduciary rule.”

This latest decision now leaves the Securities and Exchange Commission’s (SEC’s) proposed new impartial conduct standards for financial advisers and broker/dealers (B/Ds), which it set forth on April 18, as the lead alternative to the DOL’s fiduciary rule. Among other client care requirements, the proposal calls for advisers, who are fiduciaries, and broker/dealers, who are not necessarily fiduciaries, to provide all retail investors with a disclosure document no more than four pages in length outlining their services, legal and regulatory standards that apply, the fees the investors will pay and any conflicts of interest.

Secondly, the proposal calls for broker/dealers to keep customer interests first, and lastly, the proposal will recast the fiduciary standard under the Advisers Act, “to reaffirm and clarify the SEC’s views on the standards of conduct applicable to investment advisers, who are fiduciaries.”